Police and workers inside the Yue Yuen complex in April. Photo by CLB.

The strike at an Adidas shoe factory, the sheer scale of it and workers’ increasing skills of organizing strikes without bonafide union representation have created a renewed round of debate on how Chinese authorities will handle increasingly tense industrial relations in China

By Jennifer CheungThe nearly two week-long strike at the Taiwanese-owned and Hong Kong-listed factory Yue Yuen (dubbed the largest factory in China since the 1970s) motivated 40,000 workers to join in, and was organised on the workers’ QQ groups, a Chinese online instant chatting tool. Both the government and the official trade union later acknowledged that Yue Yuen committed malpractice by failing to pay workers their full social insurance package, an illegal practice rampantly adopted by factory bosses to save labour costs, who usually do so with impunity. Therefore, it is difficult to estimate whether the outburst of workers’ collective discontent at Yue Yuen is the climax of industrial action in recent years, or just the beginning.

But the real question for the Chinese government is: what is the best strategy to cope with such wildcat strikes, which quickly become unmanageable? In Yue Yuen’s case, workers walked out of the factory compound and marched through nearby streets. Factory production was interrupted, and Adidas reportedly had to shift part of its orders from Yue Yuen to minimise the strike’s impact. The deployment of riot police and even military forces to threaten, beat, and detain striking workers, and the criminal prosecution of strike leaders, only politicised the industrial labour actions and created more tension between workers and the government, leaving the original labour dispute largely unresolved.

The factory unions are neither trusted by workers nor responsive to workers’ complaints before it is much too late. The enterprise union committee is usually made up of management, whose interests most of the time side with employers rather than with rank and file workers. In Yue Yuen’s case, workers interviewed by China Labour Bulletin said they never saw any union staff, did not know who the union chairman is, nor did they care about what their unions might have to say.

The official union controlled by the Communist Party, the All China Federation of Trade Unions (ACFTU), is often seen as juggling its roles of maintaining social stability and its rubber stamp function of representing the 270 million-strong migrant workforce. It has been busy rolling out union reform by allowing democratic elections in grassroots unions and has conducted some experiments and pilot projects in Pearl River Delta-based factories, but the efficacy of those reforms has various interpretations. Both the official union and the employer fear workers might elect the ‘wrong guy’, who would neither help the official union foster stability nor help the employer maintain a loyal and productive workforce. Last year, the democratically elected union chairman requested permission to resign due to pressures on all sides. Workers are not won over by the official union either. It is reported by The Economist that Yue Yuen workers tore up mediation letters sent to them by the government-backed union.

Labour NGOs that provide legal advice and collective bargaining training to workers are also in a friend-and-foe situation with the government authorities. On one hand, the government wants labour NGOs to help cultivate a skilled and educated workforce--in other words, a ‘manageable’ workforce; on the other hand, the government does not want these NGOs to stay too close to workers and become ‘trouble makers’. The ‘enforced vacation’ of labour rights advocate Zhang Zhiru illustrates this point. Zhang told Reuters he and another colleague at Shenzhen Chunfeng Labour Dispute Service Center were detained by security police when they were helping workers organise to press their labour demands. The security police tried to persuade Zhang to stay away from Yue Yuen workers, but Zhang refused. Zhang was then taken to a ‘vacation area’ in the suburbs of nearby Guangzhou, where he was confined to a room and cut off from external communications for over two days.

As the strike at Yue Yuen gradually recedes, Guangdong provincial trade union chairman Huang Yebin has told the Southern Daily that trade unions at all levels represent workers’ interests and have negotiated with the employer, who has agreed to pay workers their full social insurance package. Huang claimed by April 27, 90 percent of Yue Yuen workers have returned to work. But different noises are coming from some of the workers.

It remains to be seen whether the official trade union offer can satisfy workers’ demands (at least temporarily), and whether those demands will go beyond salary increases and pensions to include entitlement to self-governance and industrial democracy.

Historical insights in western countries such as the United States show that long-lasting labour unrest eventually forces governments to compromise and grant workers the right to set up independent unions with the right to collective bargaining. In China’s case, the party's state experiment in finding the best strategy to secure industrial peace, including democratic union elections, will also shed some light on how it is tlikely to achieve its unswerving priority of maintaining social stability in general.